ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The Federal Reserve is responsible for supervising–monitoring, inspecting, and examining–certain financial institutions to ensure that they comply with rules and regulations, and that they operate in a safe and sound manner.

Detailed explanation-2: -Supervising and regulating banks and other important financial institutions to ensure the safety and soundness of the nation’s banking and financial system and to protect the credit rights of consumers. Maintaining the stability of the financial system and containing systemic risk that may arise in financial markets.

Detailed explanation-3: -The Federal Reserve regulates state-chartered member banks, bank holding companies, foreign branches of U.S. national and state member banks, Edge Act Corporations, and state-chartered U.S. branches and agencies of foreign banks.

Detailed explanation-4: -The Federal Reserve monitors financial system risks and engages at home and abroad to help ensure the system supports a healthy economy for U.S. households, communities, and businesses.

Detailed explanation-5: -The Federal Reserve’s supervision activities include examinations and inspections to ensure that financial institutions operate in a safe and sound manner and comply with laws and regulations. These include an assessment of a financial institution’s risk-management systems, financial conditions, and compliance.